U.S. Department of Energy - Energy Efficiency and Renewable Energy

EERE Financial Opportunities

DOE to Offer $25 Billion in Loans for Advanced Vehicles

November 6, 2008

A new DOE loan program will
help automakers and component manufacturers shift their manufacturing
facilities toward advanced, fuel-efficient vehicles.Credit:
Ford Motor Company

DOE issued an Interim Final Rule on November 6 for the Advanced
Technology Vehicles Manufacturing Loan Program, which will distribute
up to $25 billion in direct loans to automakers and component
manufacturers. The loans will help those manufacturers establish new
U.S. manufacturing facilities or reequip or expand existing ones
within the United States for the production of advanced technology
vehicles and the components for such vehicles. To expedite the loans,
the rule became effective when it was published in the
Federal Register on November 12, but DOE will also accept comments on the rule until December 12. The loan program was authorized by section
136 of the Energy Independence and Security Act of 2007, which
President Bush signed into law in December 2007. To qualify for the
loan, the vehicles being manufactured must meet tough emissions
standards while achieving a 25% greater fuel economy than similar
vehicles sold in Model Year 2005.

Congress appropriated $7.5 billion in late September to cover the
subsidy cost of the loans, and the actual amount of loans available
will depend on the financial circumstances of the borrowers and the
specifics of their proposed projects. Each manufacturer must be
financially viable to receive a loan. And although DOE intends to
expedite the loans, the agency must comply with all statutory
requirements, including the National Environmental Policy Act. DOE
expects to issue the loans in several rounds, with a new round every
three months. Applications for the first round of funding are due on
December 31. See the DOE press release and
fact sheet on the loan
program, the
loan program Web site,
and the full text of DOE's interim final rule
(PDF 1.5 MB).
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